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Gunter: Deadline on Carney-Smith oil pipeline MOU comes and goes

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Back in November amid the fanfare of Alberta Premier Danielle Smith and Prime Minister Mark Carney signing their memorandum of understanding (MOU) to get another pipeline built from Alberta to the West Coast, very few analysts paid much attention to the first deadline for more details to be worked out – April 1.

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That deadline passed on Wednesday and not one of the four deadline points has been satisfied.

There is an “agreement-in-principle” on methane equivalency, one of the four elements outlined in the MOU. But both sides announced “final details of the equivalency agreement, and follow-through on the commitment to independent and transparent verification of outcomes” have yet to be worked out.

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And there is “a draft cooperation agreement on environmental and impact assessments.”

But “agreements-in-principle” and “draft” agreements can be as hard to nail down as cumulus clouds.

They’re kind of like memorandums of understanding. They’re a promise to make an agreement sometime in the future.

The two remaining elements that aren’t even that solid yet are a carbon pricing agreement and a three-way deal among the two levels of government and the Pathways consortium of oilsands companies to build out a massive carbon-capture project that will essentially suck up the emissions from 13 oilsands mines and pump them deep underground beneath Cold Lake.

The last one is the big one. The Pathways carbon capture scheme could easily cost $20 billion, almost as much as a pipeline.

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However, its not the “what” that’s holding up real deals, it’s the “who.” The feds are in no rush to conclude detailed agreements. Indeed, they may be deliberately working against them while still pretending to support a new pipeline.

Two sources with detailed knowledge of the Alberta-Ottawa negotiations insist the hold up is the province’s surprise at how hardline the feds are being. The Alberta negotiators naively believed the Liberal government was sincerely willing to see another pipeline built and not merely making nice-nice for political purposes.

The province for its part has been naïve about the Carney Liberals’ true intent.

Premier Smith and her advisors supposedly convinced themselves that Prime Minister Carney was a new kind of Liberal – a pro-development Liberal. A Liberal who could be trusted.

It also didn’t help that the UCP government was in a hurry to complete the original MOU, so much so they didn’t push for a lot of details or assurances.

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Since last fall, the Albertans have been taken aback by the environmental stubbornness of their federal counterparts. While the Carney government’s rhetoric on the environment is not as condescendingly “green” as the Trudeau government’s, the Carney-ites are, at heart, every bit as worried about the effects of oil extraction and use as the Trudeau-ites.

If Alberta can, without much federal help, become the first jurisdiction in the world to reach net-zero emissions on oil production and transportation, then the feds might approve a pipeline, otherwise the Liberals won’t lose sleep over whether a second line gets built or not.

Two reasons the April 1 deadline was missed: Ottawa wants ironclad assurances that 75 per cent of the cost of the $20-billion carbon capture scheme and of the $30-billion pipeline will be funded either by the province or private investors.

And the feds also want a tax on carbon that is six times higher than the one Alberta charges now.

The provincial carbon tax – the TIER (Technology Innovation and Emissions Reduction) – which is currently just over $100 per tonne of emission, is charged on roughly the 700 largest emitters in the province.

Ottawa wants the TIER to cost closer to $600 a tonne and be applied to a much broader number of businesses, large and small.

I don’t know why the Alberta government didn’t see this coming. Carney or Trudeau: A Liberal is a Liberal.

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